Spokesperson Senator Farhatullah Babar said that during the visit, the president would hold talks with Iranian leadership on a host of bilateral issues and the regional situation.

He said that the visit was part of the ongoing contacts at the leadership level to further strengthen the bilateral relations and to consult each other on regional and international issues of concern to the two countries.

He added that the president has been urging further strengthening of the bilateral relations and early completion of the mega projects between the two countries.

The spokesperson said in a statement that the visit is a manifestation of the great importance Pakistan attaches to its relations with Iran. The president would return on Thursday.

Pakistani media earlier reported that President Zardari would sign a multi-billion-dollar gas pipeline project during the visit. However, the official statement did not mention the project.

Reports said that a team of Pakistani experts was currently in Iran to finalize gas price and if they reached an agreement, then the President will sign a final deal.

Under the agreement, Iran would offer a loan of 500 million U.S. dollars to Pakistan for the construction of a gas pipeline on its side of the border.

The United States has publicly opposed the Iran gas pipeline and has advised Pakistan to go for other options. American media reported this month that the Washington was likely to slap sanctions on Pakistan if it goes ahead with the project.

The U.S. State Department said on Saturday that there were better options available for Pakistan than the Iran-Pakistan project to meet the country's growing energy demands.

But, Pakistan has so far resisted the pressure and decided to go ahead with the project.

The Foreign Ministry spokesperson last week rejected reports of the U.S. pressure, insisting that the Iran-Pakistan gas pipeline project was "enormously important" for Pakistan.

Pakistan advisor on petroleum, Dr. Asim Hussain, said that Iran would set up an oil refinery in Pakistan, and reports suggested that President Zardari was likely to sign agreement for the refinery.